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D. Respect for Trust Restrictions
As just discussed, as “agent” of Mercury Solar PTO, Sparkman
was authorized to, and did, operate the Mercury Solar business “to
the same extent as if he were the owner”. He appears to have made
(almost entirely to himself) the Mercury Solar PTO income
allocations and distributions, even though the Mercury Solar PTO
formation document appears to confer that duty on the “Fiduciary
Owners”. Moreover, as previously noted, Mercury Solar PTO
organizational documents were in practice disregarded in various
important ways, including these: Porter was named “trustee” even
though the organizational documents made no provision for a
“trustee”; the first and only “Fiduciary Owner” resigned and was
never replaced by another; schedules A and B of the Mercury Solar
PTO formation document show HEH’s being assigned 100 beneficiary
certificates twice, even though the formation documents authorized
only 100 certificates in total; the record of certificate
ownership is, by Sparkman’s and Porter’s acknowledgments,
erroneous and shows Thompson as having been assigned a Mercury
Solar PTO certificate some 3 weeks before Porter even requested
Sparkman to prepare such a certificate.
28(...continued)
Commissioner, T.C. Memo. 2002-90, Sparkman testified that he
“believed” he was the only beneficiary of Mercury Solar PTO.
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